BPMigas Pledges to Do Its Part in Fight Against Graft

Indonesia’s upstream oil and gas regulator signed a memorandum of understanding on Monday with the antigraft agency that commits it to advocating greater transparency in the industry.

Haryono Umar, the deputy for prevention at the Corruption Eradication Commission (KPK), said the agreement with the regulator, known as BPMigas, would help minimize the loss of revenue to the state from corruption and other financial inefficiencies in the oil and gas industry.

BPMigas has targeted total revenue from oil and gas production this year at $25 billion. So far, Haryono said, it has raked in just Rp 153.6 trillion ($17.2 billion) — less than 70 percent of the target.

He added that it was important to maximize the amount of revenue brought in by the country’s natural resources to benefit the people, for which greater transparency was needed in the energy industry.

Haryono said that because BPMigas was no longer tied to state oil company Pertamina, there were no updated records on the oil and gas production that it was overseeing. “The KPK and BPMigas will work with the Finance Ministry to run a new inventory on the matter,” he said.

Under the terms of the agreement, the KPK and BPMigas will work more closely together to tackle corruption in the country’s lucrative oil and gas sector.

This will include programs to boost monitoring and control of upstream oil and gas activities, antigraft education and training for those working in the field, a freer exchange of information between BPMigas and the KPK and the adoption of better management practices.

Busyro Muqoddas, the chairman of the KPK, said the agreement with the regulator was just one of several corruption-prevention programs the KPK was carrying out with government bodies.

“The aim is to lay the groundwork for measures that we can all take together [to tackle corruption],” he said.

Raden Priyono, the BPMigas head, said the antigraft campaign would lead to greater transparency in the industry, both in theory and in reality, which could be verified through an online monitoring system.

However, he hinted that the agreement did not give the regulator carte blanche to micro-manage oil and gas players.

“Don’t think that BP Migas will interfere too much,” he said.

Earlier this year, the KPK revealed it was working with the Finance Ministry to recover Rp 1.6 trillion owed in unpaid taxes by 14 oil and gas companies.

“We’re still studying the industry and ways to improve the [revenue collection] system,” Busyro said in July.

However, Indonesia Corruption Watch claimed that 33 such firms had racked up $583 million in back taxes since 2008.

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